Smart and profitable traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. Stock and forex traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new traders will try and fight the trend.

Monday, February 3, 2014

learning to trade gaps

Traders need to learn the gaps and what are the trading opportunities associated with stock gaps at the open of trading. You need one thing to watch as you are looking at whether the gaps will fill quickly. The market makers will move a stock's price up or down before the market opens so traders need to be careful. After 30 minutes or so the stock price should stabilize and show some kind of trend. Stock Gaps are caused by imbalances between buyers and sellers. If there are no sellers and an overwhelming amount of buyers want into a stock, they will be forced to raise their bid to the area where there are sellers so they can satisfy their demand. The reverse is true when sellers overwhelm the buyers.
This usually occurs when there is news on a business or the stock markets have some kind of economic news. In trading, a trader should center their decision to buy or sell based on the price in relation to supply and demand. Understanding gaps with the supply and demand type of trading offers a powerful price direction indicator. Breaking the demand level on the gap shows that the sellers could not locate any buyers willing to purchase at the former price level. This is extremely bearish and as a consequence, the price continues to slide. The opposite reaction would occur if the price gaps into, but not past a supply or demand level or support and resistance.

Investment Articles

Learning to Trade

Stock market trading the fear of losing If you are a trader in the stock market losing trades are part of trading. One of the biggest emotional aspects in trading is to overcome the fear of losing. Having a losing trade causing you to have feeling of fear and pain from the loss. All good stock traders will except small loses and learn from the experience. Traders need to realize that they will have small loses its part of the trading game as they learn to play to win. They will adjust their trading strategy to keep losses small and their winning stock trades big. As a stock trader you need to learn what the successful traders are doing and study their trading style. This way you will limit your losses and keep them manageable. You need to work on your mind set that you will have losses in stock trading. Learning to trade with a mind set of not to lose is good to a certain point. Small losses are the price to be paid to be a consistence winner in the stock markets

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